The following is a summary of the Potbelly Corporation (PBPB) Q3 2024 Earnings Call Transcript:

Financial Performance:

• Potbelly Corporation reported Q3 system-wide sales of approximately $139.2 million, an increase of 1% driven by system-wide unit growth.

• Revenues were $115.1 million with company-operated shop revenue of $110.8 million. Franchise revenue was $4.4 million, up 79% relative to the third quarter last year.

• Adjusted EBITDA was $8.7 million, marking a 19% growth year-over-year, driven by improved shop level margins and disciplined management of G&A.

Business Progress:

• Potbelly has introduced a range of new and returning menu items including the Farmhouse Chicken Sandwich, Blueberry Muffin Cookie, American Apple Pie Shake, and Smokestack Pork & Mac sandwich which have been well received.

• The company emphasizes digital sales, which now represent over 38% of total shop sales.

• The franchise-focused development has advanced with a total of 86 franchise shop commitments year-to-date and the planned opening of 9 to 11 total shops in Q4.

• Launched Potbelly Craft Refreshers in partnership with Tractor Beverage Company.

Opportunities:

• Strategic emphasis on franchise growth shows potential with 695 shops across 33 franchises. Potbelly expects this number to grow, signaling an opportunity for expansion in new markets.

• Increased beverage incidence rates and customer satisfaction from system-wide rollout of Potbelly Craft Refreshers.

Risks:

• External factors such as hurricanes have resulted in delays in shop development timelines, though these delays are described as short-term.

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